UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 21, 2002
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Retractable Technologies, Inc.
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(Exact Name of Registrant as Specified in Charter)
Texas 000-30885 75-2599762
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
511 Lobo Lane, Little Elm, Texas 75068-0009
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (972) 294-1010
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None
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
c. Exhibits
EXHIBIT NO. DESCRIPTION
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4. Certificate of Designation, Preferences, Rights,
and Limitations of the Series V Class B
Convertible Preferred Stock of the Company
99.1 First Amendment to Loan Agreement and Loan Documents
99.2 Note Modification Agreement
ITEM 9. REGULATION FD DISCLOSURE
Effective June 20, 2002, the Board of Directors increased the authorized
number of shares of Series V Class B Convertible Preferred Stock ("Series V
Stock") to not more than 3,097,855 shares and cancelled the reservation of
500,000 shares of Class B Convertible Preferred Stock for use as a possible
dividend to preferred stock holders. The Board further authorized the officers
to take all necessary actions, in their sole reasonable discretion, to settle up
to $4,000,000.00 in outstanding debt by the issuance of either Series V Stock,
Common Stock, options for the purchase of Common Stock, or a combination
thereof. The Board further authorized the officers to take all necessary
actions, in their sole reasonable discretion, to settle $1,500,000.00 in
accounts payable by the issuance of either Series V Stock, Common Stock, options
for the purchase of Common Stock, or a combination thereof.
SUBSTANTIAL SETTLEMENT OF KATIE PETROLEUM LOAN OBLIGATIONS
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In November 2001, the Company entered into a Loan Agreement dated the 12th
day of November, 2001, with Katie Petroleum, Inc. ("Katie Petroleum") and Thomas
J. Shaw (the "Loan Agreement"), whereby we obtained two loans for $2,500,000.00
and $1,000,000.00 respectively. The $2,500,000 loan (described in the Loan
Agreement and a Note executed on November 12, 2001) is hereinafter referred to
as the "Working Capital Loan" and the $1,000,000.00 loan is hereinafter referred
to as the "Construction Loan." There were no borrowings under the Construction
Loan. Also pursuant to the Loan Agreement, Katie Petroleum purchased a real
estate loan held by First International Bank (described in a promissory note
dated February 18, 2000) in the original principal amount of $1,500,000.00 (the
"FIB Note"). The Working Capital Loan, the Construction Loan (had it been drawn
down on), and the FIB Note were guaranteed by Thomas J. Shaw, the President and
Chief Executive Officer. Pursuant to the Loan Agreement, we gave Katie Petroleum
the right to convert all indebtedness (approximately $5 million if the
Construction Loan had been drawn down on) into Common Stock at a rate of one
share per $7.00 of indebtedness.
Effective June 21, 2002, the Company entered into a First Amendment to Loan
Agreement and Loan Documents and a Note Modification Agreement (the "Amended
Loan Documents") as well as a Securities Purchase Agreement. These documents
provided that the Katie Petroleum would cancel $2,500,000.00 of the Working
Capital Loan and $1,179,284.00 in FIB Note obligations in exchange for the
issuance of 919,821 shares of Series V Stock of the Company and options for the
purchase of 100,000 shares of Common Stock at a price of $1 per share.
Pursuant to the Amended Loan Documents, $1,179,284.00 of the FIB Note was
cancelled and discharged leaving an outstanding balance of $250,002.77.
Furthermore, the Amended Loan Documents modified the payment terms of the FIB
Note to reflect that all accrued interest shall be payable monthly and all
principal amounts shall be payable at maturity on February 18, 2005. The Amended
Loan Documents further provide that the principal balance shall not be prepaid
or paid until all accrued dividends on all classes of preferred stock have been
paid in full. In the event that not all dividends have been paid in full at
the maturity date, then the FIB Note shall be extended for one year periods
until the accrued dividends on all classes of preferred stock have been paid in
full.
The Amended Loan Documents furthermore cancelled and discharged
$2,500,000.00 of the Working Capital Loan leaving no remaining balance
outstanding. However, the parties agreed that the collateral for the Working
Capital Loan shall not be pledged to secure new debt until such time as all
accrued dividends on all classes of preferred stock have been paid in full. The
Working Capital Loan and the related Security Agreement were cancelled.
The Amended Loan Documents furthermore terminated Katie Petroleum's
commitment to make the Construction Loan. The Real Estate Lien Note dated
November 12, 2001, has been cancelled.
The rights of the Series V stockholders are set forth in the Certificate of
Designation, Preferences, Rights, and Limitations of the Series V Class B
Convertible Preferred Stock of the Company attached hereto as an exhibit. The
options to purchase up to 100,000 shares of Common Stock become exercisable
immediately at a price of $1.00 per share and terminate in three years. The
shares of Series V Stock and the options were offered and sold pursuant to
Section 4(2) of the Securities Act of 1933, as amended.
CANCELLATION OF $1,500,000.00 IN ACCOUNTS PAYABLE OBLIGATIONS
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Effective as of June 21, 2002, the Company issued 375,000 shares of Series
V Stock pursuant to Section 4(2) of the Securities Act of 1933, as amended, and
Rule 506 to an accredited investor in exchange for $1,500,000.00 in accounts
payable owed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATE: July 9, 2002 RETRACTABLE TECHNOLOGIES, INC.
(Registrant)
BY: /s/ Steven R. Wisner
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STEVEN R. WISNER
EXECUTIVE VICE PRESIDENT,
ENGINEERING & PRODUCTION